Are ACOs More About Good Accounting and Reporting Than Improving Care?

I was recently reading David Harlow’s analysis of the recently released data from CMS on ACO performance and found a lot to chew on. Most people have found the results underwhelming unless they’re big proponents of ACOs and value based reimbursement and then they’re trying to spin it as “early on” and “this is just the start.” I agree with both perspectives. Everyone is trying to figure out how to reimburse for value based care, and so far we haven’t really figured it out.

These programs aside, after reading David Harlow’s post, I asked the following question:

The thing I can’t figure out with ACOs is if they’re really changing the cost of healthcare or if they’re mostly a game of good accounting and reporting. Basically, do the measures they’re requiring really cause organizations to change how they care for patients or does it just change how organizations document and report what they’re doing?

I think this is a massive challenge with value based reimbursement. We require certain data to “prove” that there’s been a change in how organizations manage patients. However, I can imagine hundreds of scenarios where the organization just spends time managing how they collect the data as opposed to actually changing the way they care for patients in order to improve the data.

Certainly there’s value in organizations getting their heads around their performance data. So, I don’t want to say that collecting the right data won’t be helpful. However, the healthcare system as a whole isn’t going to benefit from lower costs if most ACOs are just about collecting data as opposed to making changes that influence the data in the right way. The problem is that the former is a program you can build. The later is much harder to build and track.

Plus, this doesn’t even take into account that we may be asking them to collect the wrong data. Do we really know which data we need to collect in order to lower the costs of healthcare and improve the health of patients? There is likely some low hanging fruit, but once we get past that low hanging fruit, then what?

In response to my comment, David Harlow brought up a great point about many of the ACO program successes not being reproducible. Why does an ACO in one area improve quality and reduce costs and in another it doesn’t?

All of this reminds me of the question that Steve Sisko posed in yesterday’s #KareoChat:

There are a lot of things that seem to make sense until you dig into what’s really happening. We still have a lot of digging left to do in healthcare. Although, like Steve, I’m optimistic that many of the things we’re doing with ACOs and value based care will provide benefits. How could they not?

About the author

John Lynn

John Lynn

John Lynn is the Founder of the, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • How could they not? Easy. These first crop of ACO and MSSP participants are the high achievers. The ones that feel ready to make some money with this. They jumped in early when the hurdles are low and bonuses fairly easy to reach. The data is pretty darn clear, 2/3 made nothing, which really means lost money as it takes a large investment in people and time to participate. Sure there was “some” shared savings with about 30% of them, but the costs to implement and run these programs,…. I’m sure ate most of that money up….When I look (as a front line provider and in leadership with our hospital) at ACO and MSSP, its mostly a data game. Quality measures are not outcome measures, anyone can tell you that. The quality measure game is riddled with big pharma influence (like tobacco cessation products for smoking, etc). I think most front line providers would tell you that all this EHR/CQM PQRS stuff is doing nothing to improve care, if not making it more unsafe and inefficient. If this goes national, I would expect single digit success, for many years, until the participants figure out how to flex the numbers, schedule and move the patients around, hold back care and check the boxes to get the money. Its more like Complex Care Organizations, CCO not ACO. Its a natural extension of the enormous data collection piled on front line providers via EHR programs… which as you know, is devastating the profession. Don’t ask me how to save more or figure this out yet, but I can tell you this ACO and MSSP is very similar to the HMO model, which of course, basically failed. There is always a big assumption with CMS and insurers that every patient, situation, condition is the same, I mean it has they have the same diagnosis code, right? But medicine is markedly more complex than anyone can imagine. When 2/3 of these high achieving participants can’t meet the standard, any future “forced in” participants will markedly fail. So I agree with your statement, ACOs are more about good accounting and data reporting, rather than improving care.

  • 30 or so years ago a major HMO in the NYC area was created under the premise of improving health care while cutting costs. Much of what HMO’s do today date from that era, such as making one go to their PCP to get referrals to specialists. At the time they truly felt that the PCP would coordinate the patient’s care, and thus improve the patient’s health while cutting costs. Instead, it just slowed things down for the patient, making it much harder for them to get the specialized care that they needed. In the end, it was just about cutting costs.

    Cost is still the driver now, but once again the thought of improved health is attached. Perhaps the availability of EHRs will help; back then the patient’s file went back and forth between sites, very slowly. But add EHRs and diagnostic tools and analysis and maybe you will do better this time.


  • In the US, are we now embarking on nearly the very same path that the Brits have learned doesn’t work after a decade? Did they not implement a very similar foundation to our current focus (i.e. MU, PQRS, NCQA-PCMH, MIPS, etc.)? The UK embraced a Quality and Outcomes Foundation (QOF) 11 years ago, that is now in the process of being abandoned. How are we not heading down the road of almost exactly repeating their same mistakes?
    As an example, this article is pretty damning of the whole approach of measuring the “value” of what we do based on single-disease algorithms when most patients have multi-morbidities. The Brits are now questioning… “Is it too much to hope that this time we could prioritize what matters to patients?” And note… “Systematic review of patient priorities for GP care- humaneness ranked as the top priority.”
    I am curious how long will it take and how much waste will we expend before coming to the same conclusions?
    ACOs generating overall cost savings in the range of 1% before the costs of all the administrative and data management tools are factored in? Meanwhile, it is interesting that DPC + wrap-around insurance for non-primary care is generating cost savings from 10-60% and arguably achieving the goals of the Quadruple Aims of healthcare reform?
    Are there some alternative models which can meet with some hope of success on the horizon – ?

  • For those of us that are passionate about delivering more value in health care, the current metrics that measure to measure rather than measuring to improve outcomes are very distressing. Sadly, the use of performance metrics is arguably intended not to actually deliver the “value” to patients and health professionals. There is a good discussion of this at .
    Patient and health professionals input has been (and increasingly is) less considered as we rapidly approach business models combining HMOs with the same sort of blind faith in technology and with health policy promotion as we saw with Solyndra. What can go wrong?

  • I agree the metrics used are vanity metrics used to support the IT and bureaucracy …Not very successful…and wont be. The ultimate improved care is the patients response in both physical and emotional well being. The patients perception not some administrator’s. Good luck with that. I think its time to bring back the Lindy and the Hustle because you guys keep “dancing” trying to improve things you really know little about.
    I agree with the other poster the only positive so far is exchange of information more quickly. Which is still a redundant monstrosity.

  • Randall,
    You paint such a rosey picture. The article makes an interesting point about many of the unintended consequences of quality metrics.

    If exchange of information is the most positive thing, that’s a very very very bad sign.

    P.S. The Lindy and Hustle are great fun. What’s wrong with bringing them back?

  • Most health professionals see the value and promise of information technology, and abhor the misapplication of such by the CorpGovMed Complex. The failure of society to deal with the fact that medicine can deliver more than can be afforded has opened the door for opportunists to prey upon patients and health professionals. “Quality” measures that really aren’t are now mostly about offering a means to justify shifting of financial risks. It matters not that there is little evidence this will improve outcomes, and there is growing evidence that the application of quasi-quality metrics has malicious consequences far in excess of theoretical benefits. This is setting back the appropriate use of health information technology by probably a decade, and will not end well.

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